Workers are sent away for bargain surgeries

Los Angeles Times

Carol and Ed Vogel enjoyed a weeklong all-expenses-paid trip to a Newport Beach, Calif., resort last month, and they’re scheduled to return in a couple of weeks.

The Nevada couple didn’t need frequent-flier miles or credit-card rewards to get free airfare and hotel stay as well as $1,000 in spending money. It was all because of Carol Vogel’s ailing hips and an employer’s frustration with the high cost of U.S. health care.

Her husband’s employer, newspaper publisher Stephens Media, sends employees and their family members needing hip and knee replacements to a handful of hospitals across the country that agreed to a low, fixed rate for surgery and scored well on quality of care.

This year, grocery giant Kroger Co. has flown nearly two dozen workers to hospitals across the U.S. for hip, knee or spinal- fusion surgeries in an effort to save money and improve care. Starting in January, Wal-Mart Stores Inc. will offer employees and dependents heart, spine and transplant surgeries at no cost at six major hospital systems across the nation, with free travel and lodging.

It’s all part of a growing movement by employers fed up with wildly different price tags for routine operations. In response, businesses are showering workers with generous incentives — including waiving deductibles or handing out $2,500 bonuses— to steer them to these top-performing providers offering bargain prices.

Bundled deals are common for phone service, cable TV and travel. But an all-in-one price marks a radical departure for the conventional fee-for-service medical industry in which doctors, hospitals, labs and other providers typically bill separately for each part of a procedure. Then they tack on even more if complications and unexpected costs arise.

“You expect to see the hotel, airfare and car bundled together on Expedia,” said Susan Ridgely, a senior policy analyst at Rand Corp., a nonprofit think tank in Santa Monica, Calif. “We want to stop paying by the widget in health care.”

By bringing a steady stream of new patients, the arrangement also can be a good deal for the doctors and hospitals involved.

Federal and state officials are catching on as well. Medicare and some Medicaid programs are pushing for more of these all-inclusive prices for the most common procedures, from surgeries to maternity care for low-income mothers, to eliminate some of the huge disparities in U.S. health care costs and reward high-quality providers with more patients. These programs are generally voluntary, so patients can still opt for care closer to home, although it may cost them more.

At Kroger, employees may pay 10 percent out of pocket if they choose one of the company’s 19 select hospitals, compared with 25 percent to 50 percent out of pocket for other nearby medical centers.

Carol Vogel, a 64-year-old writer in Minden, Nev., said she was skeptical about flying to another state for surgery until the human resources manager explained how much she stood to save.

In Newport Beach, “this was 100 percent paid for,” Vogel said. If she stayed closer to home in Nevada, “I would have been out $8,000 or $9,000, easy, on my insurance.”